Notes from the Asia-Pacific region: India's financial sector addresses data, AI, the evolving digital ecosystem

It is Diwali time in India. As we look forward to a week of festivities and lights, the mood is upbeat and positive. This positivity certainly impacts how we look at what is going on in the digital regulatory and policy landscape as well.

We saw yet another episode of "The Digital Personal Data Protection Act Rules will be published" with a firm date of 28 Sept. announced — only to watch the date pass by with no sign of the rules. Sigh.

There has, however, been other considerable action this last month to compensate.

Last week, the financial capital of India, Mumbai, hosted the Global Fintech Fest 2025. Considered the largest financial technology event in the world, it represents an industry of 10,000-plus fintech firms, supported by over USD40 billion in investments in the last decade. The event brought together stakeholders from the government — including the Prime Minister of India Narendra Modi who addressed a session — as well industry, policymakers, regulators and the larger financial ecosystem. 

An event like this often results in many announcements that impact data, artificial intelligence and the digital ecosystem at large. 

One discussion worth noting took place between former executive director of the Reserve Bank of India G. Padmanabhan and the Secretary, Ministry of Statistics and Program Implementation Saurabh Garg. Garg talked about the various initiatives and programs underway by the central government on the data front. The focus has been to find the right balance between making data available widely as a public good, thereby democratizing the AI ecosystem, while ensuring the protection of individual privacy. 

Garg talked of a three-tier data access architecture that would promote this balance: Tier 1 — open — would be data which could be made available for open access; Tier 2 — registered — would be data that could be made available to registered users whose identity has been verified; Tier 3 — restricted — would be highly sensitive data that could be made available to only authorized entities with safeguards instituted.

He also talked of efforts the MoSPI is making to harmonize datasets across ministries as well as state governments through metadata structures, quality assessments, standardized classification systems and anonymization techniques for protection of individuals.

The objective is ambitious. "Our aim is to reduce the lag between data collection and dissemination. Monthly data should be released within 15 days, quarterly within 45 days, and annual data within 90 days," Garg said.

When it is fintech in India, the RBI is at the heart of it.

Addressing the Global Fintech Fest, RBI Governor Sanjay Malhotra outlined the Central Bank's vision around digital public infrastructure and fintech innovation, the objective of which is inclusive and sustainable growth. He spoke of how the three key layers of identity, payments and data underpin India's digital transformation journey.

Malhotra also said that in the coming years, the RBI would focus on deepening financial access while ensuring the security and stability of India's rapidly evolving digital ecosystem. This is important given that as the digital ecosystem grows, the associated volumes of data need all the protection required for it to sustain in the long run.

The RBI's Deputy Governor, T. Rabi Sankar also spoke, discussing AI and the risks it presents. He warned that AI poses unprecedented threats to the financial system if left without effective control and urged financial institutions to approach AI with "profound responsibility," calling for mandatory safety by design checks throughout its life cycle to prevent market and payment system instability. He also talked of bias in training data and the difficulty of explaining opaque models, both of which can impede regulatory scrutiny. 

Just a few weeks prior to this in mid-September, another RBI Deputy Governor Shri M. Rajeshwar Rao addressed the CNBC-TV18 Banking Transformation Summit in Mumbai where he also talked about the risks of deploying AI. 

He discussed dangers including algorithmic bias, "black box" models, third-party risks, model risks, legal uncertainties and intellectual property-related risks.

He concluded stating, "It is therefore imperative for the financial sector to approach AI adoption with foresight, investing not just in innovation, but also in resilience by building strong governance structure, diversifying dependencies, engaging in continual assessment of emerging risks, and ensuring their AI strategies align with long-term safety and sustainability of the financial system. Ensuring that AI-driven decisions are ethical, unbiased, and transparent will be paramount in building a sustainable, AI-powered financial future. This calls for 'optimistic vigilance' wherein AI and other technologies in banking are neither feared nor embraced blindly but 'navigated.'" 

The Competition Commission of India is another regulator that has been making news, releasing a much discussed report titled "Market Study on Artificial Intelligence and Competition." The report essentially outlines how the regulator is proposing to manage competition-related issues arising from the growing use of AI.

It says AI's impact on competition could be both pro- and anti-competitive. Challenges mentioned include concentration in the AI value chain, ecosystem lock-in, risk of algorithmic collusion, price discrimination, exclusive partnerships and the opaque nature of algorithms.

The report includes a survey of AI startups. The results state 37% of respondents expressed the possibility of AI-facilitated collusion, 32% of price discrimination and 22% of predatory pricing.

"AI-driven price discrimination is emerging as a strategic pricing tool, enabled by advanced analytics and machine learning. ... potential regulatory risks including lack of transparency, reduced consumer trust, particularly for vulnerable segments. AI could also be used to implement predatory strategies, by targeting below-cost pricing only for price-sensitive customers or those at risk of switching, while keeping the prices unchanged for other customers," it says. 

While regulators have been active, users are not far behind. Some well-known film celebrities have been active over the past month seeking protection for their "personality rights." While others have done this in the past, the sudden flurry of recent activity on this front caught my attention.

One of India's leading filmmakers Karan Johar approached the Delhi High Court for this, as have leading actors Aishwarya Rai Bachchan and her husband Abhishek Bachchan. Around the same time frame, leading south Indian actor Nagarjuna Akkineni did the same. 

The narrative remains familiar — of their names being used in an unauthorized manner, impersonation, and illegal sale of merchandise in their names. Meanwhile, singer Asha Bhonsle went before the High Court of Bombay with the same complaints.

Talking of films, Indian film producers and Hollywood studios are pressing the Indian government to implement a licensing system to stop AI firms from using intellectual property — such as films, songs and trailers — to train AI models without any compensation, Reuters reports.

Finally, a recent World Bank Group report titled "South Asia Development Update: Jobs, AI, and Trade" shared interesting statistics around AI. It states that with the increasing use of AI tools, like OpenAI's ChatGPT, has led to a 20% decline in monthly white-collar job listings in South Asia. Meanwhile, 7% of jobs in the region are highly at risk from AI adoption and automation.

It further states that the business services sector is particularly vulnerable to job displacement from AI, even though it stands to gain in terms of productivity.

Shivangi Nadkarni is senior vice president and general manager, digital trust at Persistent Systems.